James Yand | Miller Nash
The Washington Legislature enacted a requirement that contractors and subcontractors must get paid promptly for undisputed additional work on both public and private construction projects.
The new law enacted in 2024 requires project owners on construction projects to issue a change order to the impacted contractor within 30 days after the satisfactory completion of any additional work performed on the project. However, the buck does not stop with the owner. Within 10 days of receiving a change order from the owner or upper-tier contractor, the contractor or subcontractor must issue change orders to lower-tier subcontractors covered by the additional work performed. This stream of communication means each party in the construction chain should receive a timely written change order for the work performed.
Failure to issue the change order and payment in a timely fashion will cost the violating party interest at 12 percent on all sums due. If litigation is required to enforce the amounts due, the statute allows for attorney fees and costs to be awarded. This gives real teeth to getting paid promptly for extra work that arises during the course of construction.
Request for Change Order
The key to making the statute work is the Request for Completion and Prompt Payment Notice. A sample notice is provided below but should be adapted to specific projects and circumstances.
NOTICE OF REQUEST FOR PROMPT PAYMENT UNDER RCW 39.04.360
Project Name:
Project Manager:
Pursuant to statute, Contractor X hereby gives notice and requests a written change order and prompt payment for work satisfactorily completed on (date) on (Project Name) at the request of . Payment should be paid in the amount of $ or such portion of additional work that is due pursuant to statute no later than 30 days from the date of this notice. Absent prompt payment within 30 days, Contractor will add interest at 12% per annum plus legal fees incurred to the unpaid balance due.
Contractor X
By:
Dated:
Address:
Once the work has been satisfactorily completed, the request for change order and payment should be delivered to the party directing the work to be performed, whether it is an upper-tier subcontractor, general contractor, or the owner. Sending this notice will trigger the remedies provided in the statute.
Residential Projects Exempt
Private residential projects under 12 units are exempt from the change order legislation. This continues a trend of allowing private residential construction to live by its own set of rules for change orders as well as construction retention limitations.
Unresolved Issues
Lastly, there are terms in the change order statute that were not defined, most notably the word “undisputed,” that must be interpreted by the courts but will serve as a threshold issue of whether the statutory remedies apply to the work performed. The statute also does not state that it applies retroactively to existing contracts and, thus, it is presumed that it will be applied to only new contracts or change orders arising after the effective date of June 6, 2024.
When one of your cases is in need of a construction expert, estimates, insurance appraisal or umpire services in defect or insurance disputes – please call Advise & Consult, Inc. at 888.684.8305, or email experts@adviseandconsult.net.